Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., eliminated government-related debt from his flagship fund
last month as the U.S. projected record budget deficits.

Pimco’s $237 billion Total Return Fund last held zero government-related debt in January 2009. Gross had cut the holdings to 12 percent of assets in
January, according to the Newport Beach, California-based company’s website. The fund’s net cash-and-equivalent position surged from 5 percent to
23 percent in February, the highest since May 2008.
...

The basis for Gross pulling out of Government bonds completely is that he doesn't feel there will be a QE3. The market is riding on an artificial
wave of QE2 credit.

IMHO, QE3 would cause further inflation and global instability. I suspect the Fed and global government entities know this. QE3 would cause an even
greater deficit, and raise the cost of financing debt interest.

No QE3 means a stronger dollar. If this is true then there should be a long term decline in values of stocks and commodities.

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